How did this get missed? I haven't seen anything on the forum. Not to mention, The Oklahoman found it unworthy of news. And here we are just 48 hours before the annual meeting.


ISS advises against McClendon for board

Influential proxy advisory firm ISS has recommended Chesapeake Energy shareholders oppose chief executive Aubrey McClendon's re-nomination to the board of directors.

The group cited an unresponsiveness on McClendon’s part to investors and compensation issues, Reuters reported.

ISS also urges shareholders to vote against the reelection of former US Senator Don Nickles, who is chairman of the governance committee of the US natural gas company.

"A pay-for-performance disconnect has been identified at this company," ISS said in a 16 May report. "The company does not use any performance-linked incentive, choosing to rely instead on the discretion of the compensation committee."

Chief executive Aubrey McClendon's pay rose 13.4% last year, while one-year total shareholder return was only 1.4%, below the peer median of 35%, ISS said.

McClendon also receives excessive perks, the proxy advisory firm wrote.

ISS also recommended holders opposed the company's executive compensation plan, the filing said.

In a letter to shareholders, Chesapeake wrote that ISS's reliance on short-term stock performance should instead be focused on the long term.

The company also told investors that its board takes feedback from corporate governance specialists and big shareholders, factors that ISS did not take into account.

-------------------------

He's treated like a God here in Oklahoma City, but McClendon deserves the boot from the board. And he's not the only one, that board is loaded with McClendon lackeys. His compensation package is so far askew from reality that it should be derided by all that care about the future of CHK. The big question - will stockholders or the SEC bring down Aubrey McClendon first? CHK is rogue and out of control.

http://www.upstreamonline.com/live/article258872.ece

CHKand McClendon still out of control. ISS says McClendon & Nickles should get the boot from the Board of Directors. Thread here. (http://www.okctalk.com/showthread.php?t=26031&page=1)

Edit: At the thread linked above is another link to an MSNBC story today from the Motley. "It's Even Worse Than You Think At Chesapeake Energy"

With McClendon out, how long before CHK merges with someone or relocates to Houston?

I think the question should be turned around:

With McClendon still running the show, how long before CHK becomes a prime takeover target and relocates to Houston?

Remember, ISS just says he should be kicked off the board - he's still CEO. However, I think he's a disaster waiting to happen for Oklahoma City.


(........waiting for Brent Gooden & his "PR" firm to enter the thread and "correct" the record.)

And the piling on begins (and rightfully so).....

MSNBC (today) from Motley's Matt Koppenheffer:

"It's Worse Than You Think At Chesapeake Energy" (http://www.msnbc.msn.com/id/43325721/ns/business-motley_fool/)


The governance practices at Chesapeake Energy with regards to its CEO are a complete joke.

"Keep pulling the sweater ... Eventually the thing will unravel."
-- Zoolander

That odd quote from Ben Stiller's classic comedy has been stuck in my head ever since I published a story on the compensation for Chesapeake Energy's Aubrey McClendon.

I got plenty of good feedback on the story, and a number of folks who shared the view of McClendon as the consummate big-spending gambler. I also heard a couple of times that the extent to which McClendon gets rich from Chesapeake only begins with the compensation package that I focused on previously.

The rest of the story:

http://www.msnbc.msn.com/id/43325721/ns/business-motley_fool/

CHK and McClendon are both great and getting better every day .... did/do you read the annual report? ... ISS is a joke ... clearly you have something personal against AM and or CHK

CHK and McClendon are both great and getting better every day .... did/do you read the annual report? ... ISS is a joke ... clearly you have something personal against AM and or CHK

Riigghhhhtttt. That's it. Kill the messenger. Make it about ME. Is your head in the sand?

I find it rather humorous that anytime anyone ever worries about any company in Oklahoma, their default twitch is "looks like they are relocating to Houston." If Aubrey gets the boot, maybe they will, or maybe they won't. Oklahoma City is a completely different environment today than it was during the energy exodus to Texas in the 1980s. It's even different when Kerr McGee was dissolved, but that company had dried up long before Anadarko swallowed them up. The city is much more appealing to companies when considering the QOL factor, so the chance is greater they will want to stay.

Now, if CHK DOES become a take-over target by a Texas company... well, let's just put it this way: Texans only care about Texans.

Here's the original story (from last week) that, after closer inspection, prompted Koppenheffer to write the follow-up (in the MSNBC link above).
"Is This Company's CEO Worth It: Chesapeake Energy"
http://www.fool.com/investing/general/2011/05/30/is-this-companys-ceo-worth-it-chesapeake-energy.aspx

Yikes...Trouble in paradise?

I find it rather humorous that anytime anyone ever worries about any company in Oklahoma, their default twitch is "looks like they are relocating to Houston." If Aubrey gets the boot, maybe they will, or maybe they won't. Oklahoma City is a completely different environment today than it was during the energy exodus to Texas in the 1980s. It's even different when Kerr McGee was dissolved, but that company had dried up long before Anadarko swallowed them up. The city is much more appealing to companies when considering the QOL factor, so the chance is greater they will want to stay.

Now, if CHK DOES become a take-over target by a Texas company... well, let's just put it this way: Texans only care about Texans.

The only companies I could see buying Chesapeake would be Exxon, ConocoPhillips, and Encana.

The ISS's of the world are the reason why the financial sector is a complete mess, they are symptomatic of the typical short sightedness that the profit takers (they can no longer be called investors) focus on. It is pretty dang simple, if someone feels that CHK is a bad investment, don't put your money in there and eventually the stock prices will reflect that many people do but evidently most don't. All upper level management types get a ridiculous payday anymore, it isn't just McClendon or energy sector honchos, the worst of the worst are the financial sector upper management who keep granting themselves lavish packages when they lose billions.

Well, see here's the problem. Before the Devon Tower began construction, someone came on here claiming that Devon might be up for sale and there would be no tower. Yyyyeah. Then, people speculated that the Devon Tower would be scaled back like the OneOK Tower was in Tulsa after oil prices dropped. Last time I checked, the forms are coming together for floor 47. For every piece of good news about OKC we celebrate, there is always a group of people that say "well, that's great, but..."

So when is enough going to be enough? I am not saying MikeOKC is wrong or right, but we seem to hit these 'The sky might be falling, pack for Texas' conversations every year like clock work. Am I the only one that sees a problem here?

The thing is is that we aren't really the ones saying this. These concerns are coming from national writers and industry experts. One thing that I don't think anyone can disagree with is his $75 mil salary a couple years ago when the stock price tanked. That is complete recklessness.

So when is enough going to be enough? I am not saying MikeOKC is wrong or right, but we seem to hit these 'The sky might be falling, pack for Texas' conversations every year like clock work. Am I the only one that sees a problem here?

Per the the Texas bit.... I was responding to Midtowner more in jest than anything. That's not the issue. The issue is the continued rogue behavior of CHK.

The ISS's of the world are the reason why the financial sector is a complete mess, they are symptomatic of the typical short sightedness that the profit takers (they can no longer be called investors) focus on. It is pretty dang simple, if someone feels that CHK is a bad investment, don't put your money in there and eventually the stock prices will reflect that many people do but evidently most don't. All upper level management types get a ridiculous payday anymore, it isn't just McClendon or energy sector honchos, the worst of the worst are the financial sector upper management who keep granting themselves lavish packages when they lose billions.

I think the major point from analysts is that CHK was raked over the coals on the now infamous AM compensation package and all the board has done to correct it is - nothing. Did you read those articles? It's clear that very many people believe AM is still running CHK like it's a private company and has a board that's doing his personal bidding for compensation-stacking that is unacceptable at a public company. It's obviously very carefully skirting the law. Yes, you are right, there are a lot of ridiculous pay packages out there. But they aren't the issue. CHK and Aubrey McClendon are being singled out for a reason. "Horrible corporate governance" in the words of one. Having board directors making $577,000.00 a year is rightfully called "scandalous" for a reason. They're not going to buck you when you're on the board and controlling things like it's a private company and paying them those ludicrous pay days for - literally - a few days of work. I think CHK stockholders better listen. When that one writer quoted Zoolander, I'm afraid he's pretty damn close: "Keep pulling the sweater ... Eventually the thing will unravel." And frankly, Oklahoma City cannot afford problems at CHK with corporate cowboys putting not only CHK, but our city, at risk.

The thing is is that we aren't really the ones saying this. These concerns are coming from national writers and industry experts. One thing that I don't think anyone can disagree with is his $75 mil salary a couple years ago when the stock price tanked. That is complete recklessness.

Many 'national writers' analysis is totally/nearly useless, that is why their day job is writing about stocks not trading them.

Today - it's the Wall Street Journal

Chesapeake CEO Faces Storm

"Chesapeake Energy Corp., facing calls from an influential advisory firm to oust co-founder and Chief Executive Aubrey McClendon as chairman over executive pay issues, gave ground hours before its annual meeting.

Mr. McClendon has proved a controversial figure, at once admired for building the nation's second-largest natural-gas producer from scratch, but also criticized for appearing to flout normal standards of corporate governance regarding compensation. Unlike many executives in the country, Mr. McClendon's compensation is set solely at the nine-member board's discretion and hasn't been tied to stated performance standards.

Hours ahead of the annual meeting, Chesapeake on Thursday filed a statement with the U.S. Securities and Exchange Commission committing to implement an "executive compensation system that includes objective performance criteria," as recommended by an independent compensation consultant the company engaged in March. The company had eschewed tying compensation to such objective metrics as recently as April, according to regulatory filings."

~

"Mr. McClendon has made more than $152 million in cash, stock and perquisites since 2008, according to federal filings, making him one of the nation's highest-paid chief executives in any industry."

~

"Directors' pay for 2010 averaged above half a million dollars, including their personal use of corporate aircraft."

http://online.wsj.com/article/SB10001424052702304778304576375743181597036.html

A McClendon apologist is also quoted - there's few of them. Many of my friends here at OKCTalk don't realize this man's hubris has made him the poster boy for all that's wrong with corporate governance.

Today - it's the Wall Street Journal. "
"Chesapeake CEO Faces Storm"
http://www.okctalk.com/showthread.php?t=26031&p=437389#post437389

Yes, Aubrey, we keep telling you it's a public company now!

Many 'national writers' analysis is totally/nearly useless, that is why their day job is writing about stocks not trading them.

Well now its just another writer, from the nobody newspaper Wall Street Journal. They probably dont know anything either.

Chesapeake may very well be fine and go on to do great things and make shareholders happy but it doesnt have to take any national writer to realize that Aubrey has stocked the board with yes-men that do whatever he wants them to do. Hard for board members to say no when they are getting the compensation he gives them

but...but...he's helping to bring Whole Foods to the employees! Isn't that about how it goes in this town?

Or, how about, without McClendon and his cronies on the board, CHK wouldn't have been afforded the privilege of owning an expensive, exotic map collection. The wine is another story.

Wasn't there an article recently ragging on Tom Ward of SD as well for being over compensated, like compensated similarly to the CEO of Exxon Mobil, etc.

I'm trying to see the whole picture here: Aubrey took CHK from nothing to billions, and while he did it mostly with OPM, he and Katie have a ton of skin in the game. Both are heavily invested (time & money) in Oklahoma City business, education, philanthropy, the arts and culture (just look at Bill Gumerson's contributed piece in today's DO praising Aubrey's leadership in bringing the ProCure Proton Therapy Center to OKC). Yes, CHK could be more transparent, use better compensation practices, etc., but if we're going to make this all about tearing down Aubrey McClendon, don't forget that there's a lot of him worthy of being held up.

From Forbes today (6/10/11): http://blogs.forbes.com/christopherhelman/2011/06/10/its-high-time-chesapeakes-mcclendon-felt-the-heat/

It’s High Time Chesapeake’s McClendon Felt The Heat
by Christopher Helman
Aubrey McClendon, the billionaire co-founder of natural gas giant Chesapeake Energy has responded to pressure from grumpy shareholders and proxy advisory firm Institutional Shareholder Services to overhaul the way Chesapeake doles out unwarranted and unprecedented riches to him. On Thursday, ahead of today’s annual meeting, the company agreed to put in place a policy of awarding McClendon (and other execs) according to his performance, rather than just because of his kingly position, august bearing and sweetheart relationships with his hand-picked board members. Too little, too late. Shareholders should follow the recommendation of ISS and refuse to reelect McClendon to Chesapeake’s board of directors.
* * *
The highest profile among dozens of complaints against Chesapeake involved Oklahoma bilionaire Harold Hamm, ceo of Continenatal Resources (see: Chesapeake Lawsuits Pit Billionaire Against Billionaire (http://blogs.forbes.com/christopherhelman/2011/01/31/chesapeake-energy-lawsuits-pit-billionaire-against-billionaire/)). McClendon personally arranged a contract the Hamm for Chesapeake to buy Continental’s acreage in Michigan, then months later tried to weasel out of the deal without paying anything. Hamm sued Chesapeake for $20 million, the value of the contract. McClendon settled that case with Hamm a month or so ago, with Chesapeake finally paying what it owed and McClendon trying to make amends. Hamm is a big enough guy to stand up to McClendon and win; smaller fry will face years of legal wrangling. A small operator, Frontier Energy, has sued Chesapeake for welshing on $24 million in contracts. Other plaintiffs include pensioners and farmers who bought new equipment in anticipation of Chesapeake’s money coming in, only to lose their farm when Chesapeake refused payment.
* * *

It's entirely possible to respect and appreciate what McClendon and CHK have done for the community and it's employees while also being concerned about steady independent reports and opinions about the company's spending habits, compensation and governance.

It's also entirely possible to run an innovative, fast-growing successful company without absurd salary packages for the top brass and constantly calling attention to yourself in a less than positive way.


As much as everyone loves Aubrey and Chesapeake for what they have done for OKC and still plan to do, the simple fact is that the community has a real stake in their long-term viability and there seems to be a steady stream of these types of articles while other companies (like Devon) flourish with hardly a ripple of criticism.

AM and Nickles survived - but the message was sent. 78% voted for AM. He received around 98% last time. In the financial world of corporate governance, 78% is actually a scare.

Here's the first I've seen of news on the web:
http://www.ft.com/intl/cms/s/0/50290ffc-93af-11e0-922e-00144feab49a.html#axzz1Ov9XwdOi

I'll leave it at this....now that the shareholders have not taken care of their own housekeeping, the SEC's official investigation into CHK practices begins in 3....2....1....

CHK is also moving more into the fracing world outside of their own in-house operations. They recently bought into a company based in Houston but that has one of their larger operations centers in Chickasha. I have a friend that has been working for Frac Tech for a few years now. Word is an IPO is on their radar soon, but if CHK is getting their paws in the mix, who knows.

From what I understand, FracTech is a great one to side with though for CHK. They use a mixture that is NOT harmful and all the stories you hear about groundwater contimination are apparently done by pretty crappy companies that do little to look at the environmental side. So in terms of being clean and green (as far as you can be when you're sucking crap out of the ground), they at least chose a good company to side with.

http://uk.reuters.com/article/2011/05/09/fractech-chesapeake-idUKN0921850820110509

CHK is also moving more into the fracing world outside of their own in-house operations. They recently bought into a company based in Houston but that has one of their larger operations centers in Chickasha. I have a friend that has been working for Frac Tech for a few years now. Word is an IPO is on their radar soon, but if CHK is getting their paws in the mix, who knows.

From what I understand, FracTech is a great one to side with though for CHK. They use a mixture that is NOT harmful and all the stories you hear about groundwater contimination are apparently done by pretty crappy companies that do little to look at the environmental side. So in terms of being clean and green (as far as you can be when you're sucking crap out of the ground), they at least chose a good company to side with.

http://uk.reuters.com/article/2011/05/09/fractech-chesapeake-idUKN0921850820110509

This is what I've suspected. Let's be honest, here. Fracking is a potential environmental disaster and water is a precious resource. This is why I don't understand why responsible owners like Chesapeake and Devon are so hostile to regulation. To me, regulation protects responsible operators and provides punishment to those who do it wrong. Virtually every industry that "self regulates" fails at doing so, and energy companies are notoriously bad at it.

This is what I've suspected. Let's be honest, here. Fracking is a potential environmental disaster and water is a precious resource. This is why I don't understand why responsible owners like Chesapeake and Devon are so hostile to regulation. To me, regulation protects responsible operators and provides punishment to those who do it wrong. Virtually every industry that "self regulates" fails at doing so, and energy companies are notoriously bad at it.

Many problems that are attributed to a bad frac job are really a bad Cement job.
There are very few problems with fracing and what few there are often highly exaggerated.


There is a micro cap Canadian Co called GASFRAC (GSFVF) who issued its IPO several months ago who uses no water in its frac jobs.
They claim a lower overall cost for several reasons. There is no water disposal..... Because there is no de watering the well can be put on line quicker and there is no wasteful flaring.
GASFRAC says that its frac jobs can achieve up to 20% better well production. They use far fewer vehicles and associated equipment.
However unfounded they are…… there is no reason to fear ground water contamination. For reasons that have nothing to with graound water contamination GASFRAC is a greener way to frac.
GASFRAC uses propane that is liquefied instead of water. Most of the propane is recovered, what is not is sent down a pipeline.

GASFRAC is a company that is so small that it’s not very well known company nor is its method of fracing.

A. McClendon is scheduled to be interviewed on CNBC this afternoon during Jim Cramer's Mad Money.

A. McClendon is scheduled to be interviewed on CNBC this afternoon during Jim Cramer's Mad Money.

How'd it go?

hmm, i think it was good.

A.M said they are gonna hire 2000 people this year and average compensation of those jobs is ~75K/year

they discussed energy policy in the US, how CHK is increasing their dividend, and how they are one of the biggest drillers in the world...

I can't remember, maybe Cramer said to buy the stock!

'Peake performance

Aubrey McClendon retains his Chesapeake CEO position, despite an advisory firm's recommendation.

http://www.okgazette.com/oklahoma/article-12107-peake-performance.html#dComments

'Peake performance

Aubrey McClendon retains his Chesapeake CEO position, despite an advisory firm's recommendation.

http://www.okgazette.com/oklahoma/article-12107-peake-performance.html#dComments

Rarely do outside shareholders vote, unless their is several of the key investors already against them (which will come over time not some story published shortly before a vote) or major internal conflict does any CEO get fired/not elected.

'Peake performance

Aubrey McClendon retains his Chesapeake CEO position, despite an advisory firm's recommendation.

http://www.okgazette.com/oklahoma/article-12107-peake-performance.html#dComments

One of the most eye-opening things in this entire drama is told beautifully in the Gazette article you linked to. The no-coverage decision by The Oklahoman was a big step back to the days of E.K. and Edward Gaylord - playing like the old Pravda (Problems? What problems?). I have grown to respect and appreciate a lot about the newer Oklahoman, so to see this blatant pandering to Aubrey McClendon with his hometown newspaper not covering (censoring) what was a major corporate business story nationally was very disappointing.

CHK is center stage in page one NYT piece, Sunday, 6-26-01.
Posted story as it concerns a lot more than CHK in Current Events/Open Thread:
http://www.okctalk.com/showthread.php?t=26245

So, exactly why is it so important that you publish any negative information or article about CHK? There's a clear trend here. Head in the sand? Over what? Unless you work there you've got no horse in the race so what does it matter? What is it that you are trying to achieve? CHK does an enormous amount of good in this city and employs thousands of people. CHK will have a hard enough time trying to remain independent as time goes on. As big as it is, if Exxon-Mobil or BP or someone decided they wanted to absorb CHK, they could do it easily. Then OK would ahve about a zillion square feet of really nice EMPTY office space up on western.

CHK fires back at the NYT:


Chesapeake Energy Corp. CEO Aubrey McClendon has responded to what he considers to be a misleading article published Sunday in the New York Times.

Read more: http://newsok.com/chesapeake-strikes-back-at-nyt/article/3580837#ixzz1QWQOLbjG

CHK fires back at the NYT:

Isn't it interesting how The Oklahoman goes to bat for Aubrey, but - literally - not a peep concerning the the national news story after the ISS recommended his ouster from the board of directors? I said then, and I still believe, The no-coverage decision by The Oklahoman was a big step back to the days of E.K. and Edward Gaylord - playing like the old Pravda (Problems? What problems?). I have grown to respect and appreciate a lot about the newer Oklahoman, so to see this blatant pandering to Aubrey McClendon with his hometown newspaper not covering (censoring) what was a major corporate business story nationally was very disappointing. But now? After the NYT story? The Oklahoman goes to work as an offshoot of the CHK PR department. There's so much 'Enron' written all over Chesapeake Energy. People want to deny and act like nothing is wrong. Look where that got Enron - and their investors.


So, exactly why is it so important that you publish any negative information or article about CHK? There's a clear trend here. Head in the sand? Over what? Unless you work there you've got no horse in the race so what does it matter? What is it that you are trying to achieve? CHK does an enormous amount of good in this city and employs thousands of people. CHK will have a hard enough time trying to remain independent as time goes on. As big as it is, if Exxon-Mobil or BP or someone decided they wanted to absorb CHK, they could do it easily. Then OK would ahve about a zillion square feet of really nice EMPTY office space up on western.

Why does it matter to me? The last part of your post says it all. It's not time to turn a blind eye to all the problems of corporate (mis)governance at CHK.
It is very important that CHK succeed for the future of Oklahoma City. Right now, the padding of wealth of Mr. Aubrey McClendon is job #1 at CHK.
I agree with many, many analysts who believe AM should be gone - before he's forced to go and ruins CHK (and a good chunk of OKC) in the process.
Greed is an old story. On what planet are BILLIONS not enough, Aubrey?

Why you are expecting some groundswell of investors action for this. Even giving you every points you make the company has higher percent returns on investment over the last twenty years than most stocks. Plus outside of start-ups, forced changes in CEOs most of the time do not increase shareholder value until many years out (assuming the new CEO can show a dramatic improvement) and most of the time leads to something between no improvement but more often years of lost value, with the exception of when their are far more people than currently would want him out than words in the annual report. Do you have someone in mind that will assure investors that they will do a better job?

Why you are expecting some groundswell of investors action for this. Even giving you every points you make the company has higher percent returns on investment over the last twenty years than most stocks. Plus outside of start-ups, forced changes in CEOs most of the time do not increase shareholder value until many years out (assuming the new CEO can show a dramatic improvement) and most of the time leads to something between no improvement but more often years of lost value, with the exception of when their are far more people than currently would want him out than words in the annual report. Do you have someone in mind that will assure investors that they will do a better job?

No, I just know the current CEO is good with start-ups and running a private business, but is running the public CHK like it's still his private business and is endangering Chesapeake Energy Corp. He simply is too much of a corporate cowboy to run a public company. This truly is not personal - I'm simply outraged at what AM gets away with and I know the time will come when I will say, "I told you so." We'll see, huh?

His personal letter to employees..

http://www.facebook.com/note.php?note_id=10150305143547565

So, exactly why is it so important that you publish any negative information or article about CHK? There's a clear trend here. Head in the sand? Over what? Unless you work there you've got no horse in the race so what does it matter? What is it that you are trying to achieve? CHK does an enormous amount of good in this city and employs thousands of people. CHK will have a hard enough time trying to remain independent as time goes on. As big as it is, if Exxon-Mobil or BP or someone decided they wanted to absorb CHK, they could do it easily. Then OK would ahve about a zillion square feet of really nice EMPTY office space up on western.
This response is foolish. We should ask no questions or be critical of anybody as great as OKCs savior, Mr McClendon? Please. The guy obviously does some shady stuff. We should definitely ask questions. I also don't have to work there to be concerned. If Chpk failed it would have a huge impact on the entire city, not just employees. But wait, what am i doing? I shouldn't question Aubreys actions, he's bringing us Whole Foods, developed Classen Curve that has only siphoned tenants from other OKC centers, built some boathouse stuff and has a nice looking campus. When he does that why should I ever question the risky business practices he uses.

http://www.cnbc.com/id/43564235

This time....Aubrey is accused of blatantly buying the Governor of Pennsylvania to the tune of $450,000.00..Takes "grooming" to a new level

http://img52.imageshack.us/img52/1054/gasr.jpg


"In the-oil-and-gas business, it's called a wildcat well - when a prospector takes a big risk drilling deep in an unexplored area.

In 2004, a flamboyant Oklahoma City multimillionaire took out his hefty checkbook for what you could call the political equivalent of a wildcat well - and he struck a gusher, right here in Pennsylvania.

The $450,000 in campaign checks that energy mogul Aubrey McClendon wrote that fall helped elect a man he said he'd never even met - a relatively obscure GOP candidate for Pennsylvania attorney general, Tom Corbett."

http://articles.philly.com/2011-06-29/news/29717481_1_corbett-campaign-tom-corbett-marcellus-shale

http://www.investorvillage.com/groups.asp?mb=16083&mn=17452&pt=msg&mid=10665001

And how does it all touch the people of Pennsylvania?
http://dearsusquehanna.blogspot.com/2011/06/aubrey-mcclendon-has-hard-time-at.html
(This person actually heard some of the reports of people on the ground in PA about AM and his control-freak personality. Take note.)

And...fast on the heels of the above. Connect the dots and surprise! 2+2 really does = 4!

PA Governor Corbett threatened a veto of the budget bill if it included a natural gas tax after the PA State Senate passed a budget that included the tax. A little political maneuvering and Aubrey learns he picked this boy well. Aubrey, aren't you proud to be so blatant about buying off political leaders? Just like Uncle Bob, you think your wealth gives you entitlements. (Yes, many don't know his maternal bloodline is KERR. Aubrey is a nephew of Robert S. Kerr -- you don't think he had advantages with his "startup" way back when?)
http://thinkprogress.org/politics/2011/07/02/259291/tom-corbett-budget-gas-tax/

I'm embarrassed by this man.

CHK to Invest $1 Billion In Clean Energy (http://www.chk.com/News/Articles/Pages/1583997.aspx)

OKLAHOMA CITY, Jul 11, 2011 (BUSINESS WIRE) -- In an effort to help break OPEC's 38-year stranglehold on the U.S. economy and to lower energy costs to American consumers, enhance national security, stimulate economic growth, create hundreds of thousands of high-paying jobs and improve the environment, Chesapeake Energy Corporation (NYSE:CHK) today unveiled its plan for an achievable, scalable and affordable pathway toward a transportation future that runs on America's own abundant supplies of natural gas and oil from deep shale and other unconventional formations. Central to this private-sector initiative to stimulate world-class technological innovation and stronger economic growth is the creation of a $1.0 billion venture capital fund, Chesapeake NG Ventures Corporation (CNGV), dedicated to identifying and investing in companies and technologies that will replace the use of gasoline and diesel derived primarily from OPEC oil with domestic oil, natural gas and natural gas-to-liquids (GTL) fuels.

To fund this effort, Chesapeake will redirect approximately 1-2% of its forecasted annual drilling budget away from efforts to increase natural gas supply toward projects that will instead stimulate increased natural gas demand. Over the next 10 years, the company anticipates committing at least $1.0 billion to CNGV initiatives.



BTW, they are investing heavily in two companies; one based in Southern California and the other in Colorado.

CHK to Invest $1 Billion In Clean Energy (http://www.chk.com/News/Articles/Pages/1583997.aspx)

OKLAHOMA CITY, Jul 11, 2011 (BUSINESS WIRE) -- In an effort to help break OPEC's 38-year stranglehold on the U.S. economy and to lower energy costs to American consumers, enhance national security, stimulate economic growth, create hundreds of thousands of high-paying jobs and improve the environment, Chesapeake Energy Corporation (NYSE:CHK) today unveiled its plan for an achievable, scalable and affordable pathway toward a transportation future that runs on America's own abundant supplies of natural gas and oil from deep shale and other unconventional formations. Central to this private-sector initiative to stimulate world-class technological innovation and stronger economic growth is the creation of a $1.0 billion venture capital fund, Chesapeake NG Ventures Corporation (CNGV), dedicated to identifying and investing in companies and technologies that will replace the use of gasoline and diesel derived primarily from OPEC oil with domestic oil, natural gas and natural gas-to-liquids (GTL) fuels.

To fund this effort, Chesapeake will redirect approximately 1-2% of its forecasted annual drilling budget away from efforts to increase natural gas supply toward projects that will instead stimulate increased natural gas demand. Over the next 10 years, the company anticipates committing at least $1.0 billion to CNGV initiatives.



BTW, they are investing heavily in two companies; one based in Southern California and the other in Colorado.

I hope this Chesapeake plan is successful because it would have profound implications for our nation, state and city.
Others would be sure to follow. Our various governmental agencies need to help facilitate this and put this on fast track.

I believe this is a plan that we could all support.

CHK to Invest $1 Billion In Clean Energy (http://www.chk.com/News/Articles/Pages/1583997.aspx)

OKLAHOMA CITY, Jul 11, 2011 (BUSINESS WIRE)....

CleanER does not mean it's clean. Another Audrey McClendon-led disinformation campaign. The CHK-written press release which ends up on Business Wire (http://www.businesswire.com/portal/site/home/) (PR outlet) and runs verbatim by mainstream media shows how effective those things can be. The fact is that the this latest round of CHK disinformation is nothing more than the beginning of another huge multimillion dollar marketing campaign to make people believe natural gas is "clean." It's too bad Aubrey & Co. can't make their billions with intellectual honesty.

As I expected, the move by CHK does nothing for the stock price and is seen as little more than a PR move.

Some snippets from story from The Street.

Chesapeake's Largesse Does Little for Stock


"For Chesapeake, though, there's really only one major potential benefit from supporting the natural gas vehicle market: Impacting the supply/demand balance in the natural gas market to such a degree that natural gas prices finally break out of the doldrums. That's not going to happen as a result of Chesapeake's $1 billion investment, according to several analysts in the energy markets, and that leaves the Chesapeake move as a yawner for investors."

"It doesn't mean the natural gas vehicle investment isn't a great PR move though, and it came at a good time. The New York Times stopped just short of describing Chesapeake as a Ponzi scheme in a recent article, prompting CEO Aubrey McClendon to write an letter to employees defending the company."


"Energy analysts pointed to the first sentence of the Chesapeake announcement as the first sign that the $1 billion investment was more PR than IRR for Chesapeake shareholders, and from a CEO, Aubrey McClendon, who has never been shy about marketing: "In an effort to help break OPEC's 38-year stranglehold on the U.S. economy and to lower energy costs to American consumers, enhance national security, stimulate economic growth, create hundreds of thousands of high-paying jobs and improve the environment..." Chesapeake began its press release."

"It's PR more than anything else," said Phil Weiss, analyst at Argus Research and a constant critic of Chesapeake management. "The T. Boone Pickens supported NatGas Act has lost steam and so the ball was tossed to Aubrey and he wrote a big check," Weiss said."

"Several other energy analysts didn't want to be quoted on Chesapeake's motivation but echoed Weiss's sentiment. "It's Aubrey's ego at work here," said one analyst. "It doesn't impact Chesapeake shares [I]or the way any investor thinks about the company."

The stock was up 1.5% to $30.22 in recent trades.http://www.thestreet.com/story/11184056/1/chesapeakes-investment-does-little-for-stock.html

Here's a fascinating piece about the practice of PR/News morphing. Using, guess who (?), as an example --- yep - Chesapeake Energy. She's 100% right. This is an excellent article. It all goes back to what I wrote a post or two back about intellectual honesty. She looks at the recent back and forth between the NYT and CHK and those that support fracking. Also, she is spot-on about CHK's use of PR as "news" and how, repeated often enough, it becomes "news."
News Coverage Vs. PR: Is Fracking a Panacea or a Ponzi Scheme? (http://www.huffingtonpost.com/alison-rose-levy/a-shift-in-perceptions-of_b_897679.html)

I have to include the end of the article, as it so clearly shows how incredibly clueless and cocky AM can be:

But in the end, it all boils down to values, as McClendon makes clear his own lack of interest in the free press, in journalism, and in environmental accountability. In his open letter, he asks "What value has the NYT or environmental activists created during these same past seven years? You either create value in this world or you consume/destroy it -- we are value creators, please never forget that."

Wow.

For continuity and to show the pattern of contempt shown to stockholders, please see my post concerning CHK's latest outrage (Chesapeake Arena):
http://www.okctalk.com/showthread.php?t=23863&p=451328#post451328

And the hits just keep on comin'!


5 Outrageous CEO Spending Abuses & Perks
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/07/27/investopedia56111.DTL

AND (same day)

"Chesapeake Energy (NYSE: CHK ) occasionally enters the spotlight for the egregious pay CEO Aubrey McClendon rakes in. My Foolish colleague Matt Koppenheffer recently asked whether Chesapeake Energy is run for McClendon's benefit (http://www.fool.com/investing/general/2011/05/30/is-this-companys-ceo-worth-it-chesapeake-energy.aspx), rather than shareholder value. So it's no surprise to find Chesapeake on the list of jet-set offenders as well. Its corporate aircraft payout adds up to $500,000, with its TCL compensation score denoting "very high concern," although its AI risk rating is just "average."
http://www.fool.com/investing/general/2011/07/27/jet-lag-could-crash-your-stocks.aspx

OUCH! The truth hurts...This should wake-up some prospective CHK buyers. Aubrey, probably time for another Cramer puff piece.

Chesapeake: The Lost Decade

http://seekingalpha.com/article/287860-chesapeake-the-lost-decade

and.....

this exclusive Reuters report on Aubrey's sweetheart FWPP deal which allows him to - personally - cash-in on every well...
http://www.reuters.com/article/2011/08/15/us-chesapeake-deals-idUSTRE77E4BT20110815

"Paul Hodgson, senior research associate and an expert in executive compensation at GMI Ratings, a corporate governance research and ratings firm, expressed skepticism about the FWPP. Chesapeake's behavior and governance raise concerns that over the long term "significant shareholder loss" may occur, he said."

So much smoke, all the time, when and where is the fire? Poor Jim Cramer, Aubrey's big buddy, must think all his work for CHK is destined to be for nothing.

OUCH! The truth hurts...This should wake-up some prospective CHK buyers. Aubrey, probably time for another Cramer puff piece.

Chesapeake: The Lost Decade

http://seekingalpha.com/article/287860-chesapeake-the-lost-decade

and.....

this exclusive Reuters report on Aubrey's sweetheart FWPP deal which allows him to - personally - cash-in on every well...
http://www.reuters.com/article/2011/08/15/us-chesapeake-deals-idUSTRE77E4BT20110815

"Paul Hodgson, senior research associate and an expert in executive compensation at GMI Ratings, a corporate governance research and ratings firm, expressed skepticism about the FWPP. Chesapeake's behavior and governance raise concerns that over the long term "significant shareholder loss" may occur, he said."

So much smoke, all the time, when and where is the fire? Poor Jim Cramer, Aubrey's big buddy, must think all his work for CHK is destined to be for nothing.

http://www.philstockworld.com/wp-content/uploads/Cramer.JPG

All I saw was the headline and I knew that CHK and Aubrey McClendon would be on the list.

Banana Republic USA: Meet the 25 CEOs Who Make More Than Their Companies Pay In Taxes (http://daviddegraw.org/2011/08/banana-republic-usa-meet-the-25-ceos-who-make-more-than-their-companies-pay-in-taxes/)

Sure enough - #3 on the list.

So MikeOKC, do you pay more taxes every APril than the IRS code requires?

So MikeOKC, do you pay more taxes every APril than the IRS code requires?

No, I don't. Apples and oranges, Mug. The article and chart simply pointed out that AM was paid more in compensation in 2009 than taxes paid by the company he heads and CHK had $7.7 billion dollars of revenue. It's saying more about what your CEO is being paid than anything. Not to mention, his sweetheart FWPP deal, where he makes money - personally - on every well (see 3 or 4 posts back) isn't even counted in that compensation. With that FWPP, seriously, no telling how much McClendon rakes in as the CEO of this public company. But again, the issue is that even without that, he personally made more money than all of CHK paid in corporate taxes. That's pretty hard to fathom.

So what was he paid in 2010? And you lost me on your source from sfgate. sfgate is about as liberal leaning as a conservative paper, which blows their credibility. You've spent post after post going after a production company who over-compsensated their CEO two years ago. Again, you are not wrong in voicing your concerns, but it DOES seem that you are singling out CHK. If you're an industry insider like myself, my resources contradict what is floating around in the papers. Yes, CHK took a black mark, but when NG prices plummeted, the had to do damage control.

And yes, natural gas is clean energy. Sounds to me like the only clean energy on your agenda is a pure EV. Far from sustainable. Natural gas emits far less CO2 than gasoline.

So what was he paid in 2010? And you lost me on your source from sfgate. sfgate is about as liberal leaning as a conservative paper, which blows their credibility. You've spent post after post going after a production company who over-compsensated their CEO two years ago. Again, you are not wrong in voicing your concerns, but it DOES seem that you are singling out CHK. If you're an industry insider like myself, my resources contradict what is floating around in the papers. Yes, CHK took a black mark, but when NG prices plummeted, the had to do damage control.

And yes, natural gas is clean energy. Sounds to me like the only clean energy on your agenda is a pure EV. Far from sustainable. Natural gas emits far less CO2 than gasoline.

It's not just post after post going after Aubrey Kerr McClendon's 2009 salary. It's post after post of breaking AubreyNews. I "single" him out because his corporate governance (along with his sweetheart board of directors) is one of the worst in all of America. That's not a particularly controversial position. That's pretty much a given. Even when CHK stock is rising - the threat of an AM bombshell always looms - as the SeekingAlpha story posted earlier this month discusses.

Always something new. This was actually published by Investor Place on the 1st, but I waited until after Labor Day to mention it here:

Chesapeake Energy: Natural Gas or Hot Air? (http://www.investorplace.com/2011/09/chesapeak-energy-chk-stocks-to-sell/)


"Chesapeake is legendary for its total contempt of shareholders. Whether it’s the amount spent on corporate jets for top executives, including CEO Aubrey McClendon, or the millions sponsoring the NBA’s Oklahoma City Thunder, McClendon’s personal play toy, shareholder rights are not at the top of its priorities."

"If you want a good-paying part-time job, find a way onto Chesapeake’s board of directors. All but one of eight were paid $400,000 or more in 2010. Most impressively, McClendon managed to earn $21 million in 2010 while Chesapeake paid no federal income taxes..."

What a great reputation Aubrey enjoys!?!?! CHK will have a hard time shaking the "rogue CEO" image as long as...well...as long as they have a rogue CEO!

Just an aside and I came across this quite accidentally, I was told that a major newspaper has been or will soon have a reporter in town looking up-close at Aubrey and CHK. Specifically the use of shareholder funds for everything but energy. Think Thunder, retail, buying a neighborhood of Oklahoma City at inflated prices, part-time board directors who are wealthy on their CHK board presence alone (and mere rubber stampers for Aubrey), etc. I doubt it will be pretty. People of this city better wake-up to the fact that Aubrey Kerr McClendon has built a monster - with contempt for stockholders - that may come back to bite our city - big time.